Turning Big Data into a Dashboard for Investment Managers

The rise of data aggregators pulling information from various cloud-based sources, fueling front-end analytics, will make Big Data more usable for investment managers, contends StatPro North America's Andrew Peddar.

So far the Big Data discussion has focused largely on how firms will manage massive volumes of data deep within the bowels of the IT infrastructure. But for investment and asset managers on the front lines of the business, Big Data is really about one thing: how to get a complete and transparent view into your investment world.

For business users, Big Data management is all about usability — asset managers and investment managers need to know how they can harness, quickly analyze and report on Big Data. In other words, money managers really care about how to put information to work – so IT managers within asset management firms should focus on technology solutions that will help support that need, from the back office through to client-facing technologies.

A Single View

The main impediment to Big Data usability is that it’s very hard to get all the relevant bits of data related to a client’s portfolio into one place. Even the most powerful portfolio analytics systems, including those that are based in the cloud and can draw on massive stores of performance and pricing data, don’t always provide a view that draws on a comprehensive data set.

The reality is that a comprehensive view is very difficult to achieve. Say, for example, that an asset manager uses a portfolio management interface that lets them slice and dice data to show risk hot spots, assess historical performance and stress-test client portfolios. Those are all valuable capabilities, but they are only as strong as the data that inform them. Without confidence in the comprehensiveness of the data, portfolio managers can’t be sure they are getting a single, clear and accurate view of how their clients’ portfolios are performing.

The Rise of the Data Aggregator

Knowing that data must be comprehensive to provide a complete picture of what’s happening in any given portfolio, and knowing that data volumes are expanding by the minute, the challenge seems formidable. If tera-and petabytes of data are behind an average day or week’s worth of trades and transactions, how can an investment manager ever possibly hope to make assessments about portfolio performance with absolute confidence?

Of course, every investment manager makes educated guesses — even the most sophisticated tools can’t account for every tiny sliver of information on the markets. However, money managers can have a greater degree of confidence when they know that their portfolio analytics are informed by not just several, but many, many sources of data.